We all have the right to live long and healthy lives, without breaking the bank.  Unfortunately, our current health care system is overly complicated for everyone.  We need more transparency.  

To bring attention to this issue, cost-of-healthcare news is keeping an eye who pays how much for what -- and why -- and keeping you informed.
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Our Newsletter

Issue No. 39: Where are Health Costs Rising Most?
Hospitals. And Here is Why.

One of the great mysteries in recent years is why pharmaceutical companies are portrayed as the villains in the story of rising U.S. health care costs while hospitals are virtually ignored. A devastating article in the new issue ofNational Affairs, a respected journal that explores domestic policy, helps to set the record straight and to explain the conundrum.

Before we get the article itself, here are some recent facts about hospital costs.
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  • Total U.S. hospital spending in 2017 reached $1.1 trillion, compared with $333 billion for prescription drugs, according to a new study by the Centers for Medicare and Medicaid Services (CMS).
  • For the year ending Dec. 31, 2017, hospital costs rose 4.6%, compared with a 0.4% rise in drug costs, again according to CMS. For the previous year, hospital costs rose 5.6%, or more than two and a half times the rate of inflation. Drug costs in 2016 rose 2.3%. Hospital spending increases are outstripping drug increases again in 2018.
  • Overall, hospitals represent 33% of U.S. health costs; physician and clinical spending, 20%; drugs, 10%.
  • Hospital costs have risen by at least 4% in 11 of the past 13 years, according to the latest Altarum Health Sector Trend Report.
  • The U.S. spent 5.8% of Gross Domestic Product on hospitals in 2016 (latest data), by far the highest proportion in the OECD, the organization of rich nations. By contrast, Germany spends 3.2% of GDP on hospitals; the U.K., 4.1%; Canada, 3.1%.

What Others Are Saying

"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs."

- Michael Mandell of the Progressive Policy Institute (PPI):
"Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation."

-Wayne Weingarten of the Pacific Research Institute

Newsletter Archive

Issues 31 - Current
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Issue No. 39: January 17, 2019
Where are Health Costs Rising Most?
Hospitals. And Here is Why.

Issue No. 38: December 20, 2018
Dangerous Target Practice: Taking Aim at Drug Patents

Issue No. 37: December 4, 2018
The Truth About Drug Prices: They're Rising Less Than Inflation

Issue No. 36: November 8, 2018
The Right Way and the Wrong Way to End Disparity Between U.S. and European Drug Prices

Issue No. 35: October 25, 2018
A Surprisingly Simple Way to Save Lives and Money

Issue No. 34: October 9, 2018
Are ICER and the QALY the Right Way to Manage Access to Live-Saving Medicines?

Issue No. 33: August 28, 2018
How Much Do We Spend on Pharmaceuticals? Research Clarifies Answer to Complex Question

Issue No. 32: July 31, 2018
The U.S. is Developing Innovative Medicines in Abundance, to Fight Cancer and More

Issue No. 31: June 5, 2018
Taking Dead Aim at the Role of Pharmacy Benefit Managers in Raising Drug Costs (Plus the Gag Rule and More on 340B)

Issues 16-30
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Issue No. 30: May 8, 2018
A Day of Reckoning Approaches for 340B, the Controversial Drug Pricing Programs

Issue No. 29: April 19, 2018
Narrowing the Gap Between U.S. and Foreign Drug Costs

Issue No. 28: March 22, 2018
Redesign Insurance Plans and Reduce the Threat of High Drug Costs

Issue No. 27: March 1, 2018
Making Sense of Health Spending

Issue No. 26: February 12, 2018
Smallest Increase in Drug Spending in a Quarter-Century

Issue No. 25: January 23, 2018
For $70 a Year, Drug Innovation Is a Bargain

Issue No. 24: December 21, 2017
Spending on Drugs Rises 1.3% (Yes, 1.3%)

Issue No. 23: December 4, 2017
Biosimilars Hold Hope for Lowering Drug Costs and Improving Patient Access, but Challenges Surface

Issue No. 22: November 20, 2017
Rising Minimally: That’s the Non-Fake News About Drug Prices

Issue No. 21: October 10, 2017​​
What It Costs to Make a Pill

Issue No. 20: September 18, 2017
The ‘Deleterious Consequences’ of Popular Insurance Designs

Issue No. 19: August 28, 2017
Focus on Where the Spending Is: Hospitals

Issue No. 18: August 15, 2017
To Lower Health-Care Costs, America Has to Reduce Unhealthy Behaviors

Issue No. 17: July 20, 2017
Debunking the Mythology of Drug Costs

Issue No. 16: June 22, 2017
Importing Medicines Creates Broad Threats to Public Safety

Issues 1-15
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Issue No. 15: June 12, 2017
The Lessons of Part D's Success

Issue No. 14: May 31, 2017
Misplaced Incentives Raise Cost of Administering Drugs in Hospitals Sky-High

Issue No. 13: May 11, 2017
The Truth about PBMs

Issue No. 12: April 27, 2017
Government-Negotiated Drug Prices: Another Bad Idea Bubbles Up from the Depths

​Issue No. 11: April 18, 2017
Importing Drugs: Safety Risks, Less Access, and Little or No Savings

​Issue No. 10: March 30, 2017
The States as Drug-Price Regulators: A Bad Idea That's Catching On

Issue No. 9: March 15, 2017
Drug Prices Rise 2.5%; That's the Same as Inflation

Issue No. 8:  March 2, 2017
Is the Problem Health Care, Or Is It Health?

Issue No. 7:  February 15, 2017
Financial Effects of ACA on Health-Care Sector

Issue No. 6:  February 2, 2017
Americans Have Greater Access to New Medicines for Cancer

Issue No. 5:  January 19, 2017
How Industry Concentration Affects Health Costs

Issue No. 4:  January 5, 2017
Surprising Revelations in a Deep Dive on Health Costs

Issue No. 3:  December 21, 2016
Rising Health Costs: How to Hold Them Down by Broadening Our Thinking

Issue No. 2:  December 14, 2016
New Reports on Health Spending Need Context

Issue No. 1:  November 30, 2016
Study Shows U.S. Health System Often Delivers Less for More